Alkermes Plc (ALKS)

Cash conversion cycle

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Days of inventory on hand (DOH)	days	98.58	94.18	88.27	71.18	72.59	75.65	76.97	70.31	67.13	68.06	68.89	65.62	65.63	66.01	60.66	78.46	71.82	64.74	59.69	44.86
Days of sales outstanding (DSO)	days	89.80	67.74	74.00	78.53	84.58	88.87	95.60	83.77	77.12	76.60	98.37	94.17	99.36	85.76	97.27	83.54	75.39	76.30	81.14	86.35
Number of days of payables	days	53.03	36.58	31.09	32.23	32.44	15.19	13.94	14.04	17.28	12.18	25.53	17.45	15.82	17.76	22.21	52.92	31.42	25.57	31.82	36.17
Cash conversion cycle	days	135.35	125.33	131.18	117.47	124.74	149.33	158.64	140.04	126.98	132.48	141.73	142.34	149.17	134.01	135.72	109.09	115.80	115.47	109.02	95.04

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 98.58 + 89.80 – 53.03
= 135.35

The cash conversion cycle of Alkermes Plc has shown fluctuations over the historical period analyzed. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

The company's cash conversion cycle ranged from 95.04 days to 158.64 days over the last 20 quarters. A shorter cash conversion cycle is generally preferred as it indicates that the company is able to efficiently manage its working capital and generate cash from its operational activities.

The trend for Alkermes Plc's cash conversion cycle shows some variability, with periods of both improvement and deterioration. For example, there were noticeable improvements in efficiency during the quarters ending in December 2019, September 2020, and March 2021, where the cash conversion cycle was relatively short. Conversely, the cycle extended in the quarters ending in December 2022 and March 2023, indicating potential challenges in managing working capital during those periods.

Overall, Alkermes Plc should aim to consistently monitor and optimize its cash conversion cycle to ensure efficient working capital management and maximize cash flows from its operational activities. This may involve strategies such as improving inventory turnover, reducing receivables collection times, and optimizing payment cycles to suppliers.